3 Smart Ways to Pay for Your Home Remodel

From Brittany on May 26th, 2011 in General Remodel

As you may have noticed, the remodels with the greatest return often come at the highest price tags.

Window replacement, for instance, costs an average of $11,066, bathroom remodels go for $16,634, and minor kitchen renovations ring in at $21,695. If you lack the cash up-front to cover materials and labor, how can you afford the work your home needs this year?

Below I’ll outline some lesser-known financing options for home improvement.

To check rates for home remodels in your area, click here.

1. Loans through Your Contractor

Certain contracting companies, especially the larger ones, offer home improvement loans and financing for their customers. Just be sure that they’re a contractor you can trust and the rates are on par with industry competitors. CalFinder connects you with large-scale national contractors for all kinds of remodels. Get matched with one here at no cost.

2. Title 1 Home Improvement Loans

Title 1 loans are government-insured loans that protect your lender against any loss. You can borrow $25,000 maximum for a repayment period up to 20 years, but must have a good credit history and ability to make regular monthly payments. Eligible remodels are alterations, repairs and site improvements. You can look up a Title 1 lender in your state, or get in touch with a contractor for more information.

3. Home Equity Line of Credit

If your home has some equity, a home equity line of credit (HELOC) is an excellent way to finance your remodel. Using your home as collateral, HELOCs let you borrow a certain portion of your home’s equity. The interest rates are based on the prime rate and are typically much lower than other lending options. In today’s economy, however, you may have to front larger down payments or have lived in your home for a longer period of time.

To read more, check out the 8 Safest Financing Options for Home Improvement.

Via Remodeling Magazine; Photo by Jeremy Levine Design